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PRECIOUS-Gold near 3-mth high; eyes weekly gain on U.S. rate expectations
May 15, 2015 / 2:41 AM / 3 years ago

PRECIOUS-Gold near 3-mth high; eyes weekly gain on U.S. rate expectations

* Gold steady after 3-day rally
    * Eyes best week in four months
    * Soft U.S. data lowers expectations of June rate hike

 (Adds Chinese buying, Updates prices)
    By A. Ananthalakshmi
    SINGAPORE, May 15 (Reuters) - Gold traded near a three-month
high on Friday and was on track for its biggest weekly gain in
four months on receding expectations the Federal Reserve would
hike U.S. interest rates soon.
    Spot gold was steady at $1,220.70 an ounce by 0710
GMT, after rising 0.5 percent on Thursday. Prices had climbed to
$1,227.04 in the previous session, their highest since Feb. 17. 
    The metal is up nearly 3 percent this week, the biggest
weekly gain since mid-January.
    "Gold's break over the technical 200-day moving average of
$1,218 triggered further buying from momentum investors," said
HSBC analyst James Steel. 
    A convincing close above $1,228 will be technically bullish
for bullion and may prompt further gains, he said, adding that
bullion will continue to be sensitive to U.S. economic data.
    Recent U.S. data has supported market expectations that the
economy is not strong enough for the Fed to start rising
record-low rates from June. 
    The bullion market was getting comfort from Wednesday data
that showed U.S. retail sales were flat in April, weaker than
expected. 
    That added to second-quarter growth concerns already
prompted by sluggish U.S. nonfarm payrolls data last week.
    Data on Thursday that showed the number of Americans filing
new claims for unemployment benefits falling last week towards a
15-year low failed to alleviate concerns over the economy. 
    The dollar was trading close to four-month lows on Friday
against a basket of major currencies, on speculation the U.S.
central bank will not hike rates until later this year.
    Higher rates would boost demand for the greenback, but
diminish the appeal of non-interest-paying bullion.
    U.S. data due on Friday, including April industrial
production and the University of Michigan's preliminary May
reading on consumer sentiment, should provide more cues.
    Investors, however, seemed uncertain about bullion's rally
and how long it would last.
    Holdings in SPDR Gold Trust, the world's
largest gold-backed exchange-traded fund, fell 0.61 percent to
723.91 tonnes on Thursday, a four-month low.
    Strength in equities could be keeping some investors away.
The possibility of a delayed rate hike helped push the S&P 500
to a record high close on Thursday. 
    Physical buying slowed in Asia as higher prices kept some
consumers away. In China, premiums eased about 50 cents to $1 an
ounce over the global benchmark on Friday, from premiums of
$2-$3 earlier in the week.
    Among other precious metals, silver was headed for
its biggest weekly gain in two months. Platinum was on
track for a third straight weekly gain, but palladium was
set for a weekly decline.
    
    PRICES AT 0710 GMT
 Metal            Last     Change  Pct chg
                                          
 Spot gold         1220.7   -0.42    -0.03
 Spot silver        17.38   -0.05    -0.29
 Spot platinum     1158.7    0.15     0.01
 Spot palladium    781.98    0.98     0.13
 Comex gold        1220.6    -4.6    -0.38
 Comex silver       17.43  -0.035     -0.2
 Euro              1.1411                 
 DXY               93.394                 
                                          
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford,
Richard Pullin and Subhranshu Sahu)

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